In its recent report on the state of Southeast Asian (SEA) fintech companies, Robocash Group revealed that alternative lending and payments were two of the most dominating categories of fintech services in SEA and South Asia in 2022.

The report was based on the data gleaned from analysing the number of fintech companies operating in various countries in the region: India (541 companies or 43.1 per cent), followed by Indonesia (165 companies or 13.2 per cent), Singapore (162 companies or 12.9 per cent), the Philippines (125 companies or 10 per cent), Malaysia (84 companies or 6.7 per cent), Vietnam (78 companies or 6.2 per cent), Pakistan (51 companies or 4.1 per cent), Sri Lanka (27 companies or 2.2 per cent), with the smallest being Bangladesh (21 companies or 1.7 per cent).

Based on the data, the largest number of companies are focused on the Alternative Lending sector (544 companies or 43.4 per cent), followed by Payments & Transfers (496 companies or 39.6 per cent), E-Wallets (118 companies or 9.4 per cent), with the smallest being Digital banking (96 companies or 7.7 per cent).

It also highlighted the progression of fintech industry in the region based on the sheer number of companies operating: As of the end of 2022, there are 1,287 companies in the nine countries and four sectors studied, of which 1,254 (15.4 per cent of the total number of total active fintech companies, not just the four sectors under consideration) have the status of not Undefined (lacking data from the open sources).

“In the period from 2000 to 2022, the total number of companies increased by 3,588 per cent – from 34 to 1,254. The largest increase occurred in the period from 2015 to 2020, which marked the foundation of approx. 62 per cent of all existing companies from the four sectors under consideration,” the report stated.

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On raising money and making revenue

In addition to looking at the number of companies operating in the region and the funding that they had raised in the past years, the report also looked at other factors, such as earnings, to determine the state of the fintech industry.

It evaluated the amount of funds raised for the entire period from the date of the company’s foundation to December 31, 2022 and the amount of revenue made in 2021.

“The volume of revenue will be perceived by us as the volume of transactions related to the primary activity of the company,” the report explained.

“Over the entire history, fintechs in the four studied sectors have raised a grand total of US$53.3 billion and earned US$17.8 billion. Roughly speaking, their total rate of return (Total Revenue / Total Funding) is approximately 33.4 per cent, which means that for every dollar attracted, fintechs earn an average of 33.4 cents per year on transactions related to their activities,” it continued.

As the country with the most amount of funding raised with US$25.6 billion (48 per cent), India tops the list of the countries with most earning with US$10 billion (57.2 per cent) in 2021, followed by Indonesia with US$2.4 billion (13.7 per cent), Singapore with US$1.9 billion (10.6 per cent).

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“However, in terms of return on investment (Total Revenue / Total Funding), the most effective country is, oddly enough, Bangladesh (7840.9 per cent), then Pakistan (686.4 per cent),” the report stressed.

In SEA, Vietnam tops the list (117.6 per cent) followed by Indonesia (68.7 per cent) and Malaysia (48.5 per cent).

“Such extreme values in the first two countries (Bangladesh and Pakistan) are due to near-zero fundraising rates, while their revenue level is still below the SEA average,” the report closes.

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